Why Wind Power Doesn't Work

A very interesting report out of Holland which has in it a little point which shows why wind power simply doesn't work in any attempt to deal with climate change. My apologies, it's a slightly technical point but still a sound one.

I was alerted to the paper by Bishop Hill and you can read the whole paper here. The point at which the whole argument in favour of wind power falls over is this:

From a CO2-reduction perspective, the volume of CO2 thus saved by wind power is the CO2 otherwise emitted by a gas-fired plant. Gas-fired plants are at least twice as CO2 efficient as coalfired plants. From that perspective the cost of investing in wind to reduce CO2 could be as high as €85/tonne of CO2 saved (that is, from onshore wind investments; from offshore wind it would be around €170/tonne of CO2 abated). This is in sharp contrast to the current market price, as developed in the ETS, of less than €15/tonne of CO2.

The thing is, any system which costs more than $80 (about €65) per tonne CO2 not emitted doesn't work. Therefore wind power doesn't work as a climate change mitigation strategy.

OK, so I'm going to have to back up and explain a few things here. This study looks only at the energy infrastructure in NW Europe. That in other areas might vary one way or the other, to higher or lower costs per tonne not emitted.

It is also true that this use of wind power does lead to CO2 not being emitted so in that sense it works. But that's not the question we want to ask or even should be asking about climate change. We know very well that we can beat climate change: just kill a few billion people and we'd be done. However, we do rather think that killing a few billion people would be more expensive than putting up with the effects of climate change. I use "expense" here to mean reduction in the ability of humans to enjoy this world's glories. Lots of dead people would indeed reduce the ability of lots of people to enjoy said glories.

So, what we actually need to work out is what are the costs of having to put up with climate change? The things we'll lose (land, species, some lives yes, some economic wealth) if we just carry on as we are. This is what is known as the social cost of carbon emissions. This is a very large calculation indeed but fortunately we don't need to do this ourselves, it's been done for us. By Sir Nicholas (now Lord, for this work) Stern in fact, in the Stern Review.

Here we are told that the social cost of carbon is $80 per tonne CO2 emitted (actually, it's per tonne CO2-equivalent, so including things like methane and so on). Which gives us the really important number we need to have.

Anything which costs more than $80 per tonne CO2 not emitted is something we shouldn't do. Anything which costs less is something that we should do. The reasoning is quite simple: what we are trying to get to is the maximum possible amount of human utility. Everything about the satisfaction of human desires, from the number of dry smiling babbies through three squares a day for all to enjoyment of nature's glories and yes, even the knowledge that there exists a human invention as glorious as a Ferarri. Thus we should only be doing these things which increase that ability to satisfy human desires.

Which, in turn, means only doing those things where the benefits are greater than the costs and also not doing those things where the costs are greater than the benefits. We have our number, $80 per tonne. Anything which costs more than this per tonne CO2 not emitted reduces the total resources available to us to do other things: vaccinate the poor, clothe the naked, roll as Scrooge McDuck in vaults of gold coins. Anything that costs less than this increases resources over time. Yes, we reduce our resources now but we increase them by more in the future as a result of reducing climate change and thus avoiding some of the damage from it.

$80 really is our magic number. The one by which we should be judging all of our actions. And as we can see from the above wind power just doesn't meet that magic number. Therefore we shouldn't be building windmills because doing so reduces the resources available to human beings to enjoy this world we have.

I will admit that I expect a little criticism for laying things out in this manner. Something that rather disappoints me as there's nothing here that is rejecting any part at all of the climate change consensus. Indeed, among economists (like Lord Stern) this actually is the climate change consensus.

Oh, one final point: the idea that I might write the above because my financial interests are aligned with not wind power, with gas, coal or the fossil fuel industries. I'm afraid not, no, that isn't true. The largest potential customers for the weird metal that I deal with are those building the next generation of blades for windmills. A large expansion of wind power is likely to make me hugely richer and everyone else on the planet very slightly poorer. Fun for me as that would be I can't quite bring myself to pervert the economic science of climate change to make that happen.